| Interest rate chest-beating is a con
Or are they playing to the crowd in the hope no one notices the holes in the arguments they make?Mortgage lenders deal in the commodity of money. Their business model is to lend monety to home buyers for more than they pay to borrow it themselves. The spread between their borrowing and lending costs, less their expenses determines their profits - which some say are too much.Wholesale money market rates are not set by the Australian Treasury or the Austyralian Reserve Bank.If the politicians really want to keep interest rates down, maybe they should arrange for the government to lend to home lenders at below market rates. Otherwise they should put up and shut up and let the market do its job of deflating the housing market.If house prices drop by an average of say 20% , they will be a lot more affordable to people, even if interest rates go up a few more times.
What Is Fixed Rate Mortgage And Variable Rate Mortgage
Fixed rate mortgage, as the name suggests, carries a fixed interest for a certain period of time. That period is called as mortgage term. The term can usually be from 6 months to as long as 25 years. A variable rate mortgage has a fixed payment terms too. But its interest rate changes. It moves in pattern to the prevailing interest rates in the market. You pay a fixed amount, but it will be divided into interest payment and principal payment. So it follows that if the interest is high, more money goes for the payment for it instead of the principal. .
Editorial: Warnings don’t help economy (Jan. 23)
So just shut up people and eat your beans and rice. If you survive, you can bore your grandchildren telling them how bad it was starting back in '08 and how! you nearly starved. Besides there's not going to be a recession, just a slight correction. Nothing more. Don't worry, be happy. " .
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